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Decoding the IMF: Greek deal doomed, exit likely by Paul Mason in Greece Channel 4 News blog and report, July 15 <http://blogs.channel4.com/paul-mason-blog/greece-crisis-austerity-deal-pointless/4197> w/ additional video report . . . What this means is very simple: the third bailout agreed in principle on Sunday night is doomed to fail. First because the IMF cannot sign up to it without debt relief; second because, without debt relief it will collapse the Greek economy. This is even before you factor in issues like mass resistance to its details, or the total lack of enthusiasm for execution of the deal by the Syriza ministers who will have to do it. . . . The implication of the IMF report is that Grexit is inevitable. Without debt relief the Greek debt to GDP ratio will rise to 200%. It will be using 15% of its GDP simply to make interest payments and payments coming due. . . . I’ve found, among ordinary people who were passionate supporters of the No vote in the referendum, the widespread acceptance that – to go forward with measures on social justice or alternatives to austerity – Greece will have to leave the Euro. Most people I talk to want it done in a controlled manner, consensually and with some kind of mandate from the people. They’ve realised that Angela Merkel’s absolute refusal to countenance debt write-offs inside the Euro, alongside the IMF’s absolute insistence that they should happen, have created a cul-de-sac no Greek government can get out of without reversing out of Euro membership. Syriza – which was always a coalition of left social democrats, New Left marxists and a harder left communist group – is finding it institutionally hard to accept this logic. . . . We know from opinion polls that about 35% of Greeks want to leave the Euro but that a further 25% of those who voted No in the referendum probably fear what Alexis Tsipras spelled out last night: €250bn has left the country over the past 5 years and if Greece leaves the Euro this “drachma lobby” would be able to return to Greece and buy out everything and everybody. But listen to the IMF report – which implies the third bailout will be a disaster; and to the intransigence of Angela Merkel – who says no debt relief within the Euro. The more I look at it, logically and dispassionately, that €250bn waiting outside Greece for Grexit now looks like very smart money. And..the highly logical and dispassionate investment community is drawing that conclusion too. The levels of economic pain and dysfunctional borrowing set to be inflicted on Greece mean that at some point in the next 12-18 months there is a chance that [the] centrist 20-30% of public opinion will flip to a policy of controlled, or maybe temporary exit from the Eurozone. The only question then is: which party will offer a convincing narrative and lead it. _________________________________________________________ Full posting guidelines at: http://www.marxmail.org/sub.htm Set your options at: http://lists.csbs.utah.edu/options/marxism/archive%40mail-archive.com
